INFORMATION

UPDATE

TUPE Changes

A recent Information Update alerted you to a number of employment law changes forecast for 2014 and beyond.

We referred to Regulations making amendments to TUPE through the nattily titled Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.  Acronymically known as CRATUPEAR within legal circles (lawyers humour perhaps?).

These Regulations come into force today, 31st January 2014 and in summary make the following changes:

• Redundancy / TUPE consultation- permit a transferee , subject to the transferor’s agreement, to carry out collective redundancy consultation with all affected employees (including the transferring employees) prior to a TUPE transfer in respect of any proposed post-transfer dismissals.  
• Service Provision Changes- for a service provision change to be considered under TUPE, the services which transfer must be “fundamentally the same” as the activities carried out pre-transfer.
• Post-transfer changes to terms and conditions-  
• change to terms and conditions will only be void if the sole or principal reason for the change is the transfer itself (rather than for a reason connected to the transfer) except when an economic, technical or organisational reason entailing changes in the workforce (“ETO reason”) exists;  
• change will be permitted if it is because of the transfer, but the terms of the contract permit the employer to make the change; and/or 
• changes to terms contained in a collective agreement will not be void if made at least one year after the date of the transfer, and providing the employees’ overall terms and conditions are no less favourable than those which applied before the variation.
• ‘Static’ approach to collective agreements- only the terms contained within a collective agreement in existence at the date of the transfer will be binding on the transferee.  Post-transfer changes to collective agreements terms will not be binding on the transferee if the transferee is not a party to the negotiation of those changes.
• Protection against dismissal- a dismissal will only be automatically unfair (and liability passes to the transferee) if the sole or principal reason for the dismissal is the transfer itself, (instead of it being a reason connected to the transfer).  The current exemption to automatic unfair dismissal remains where an ETO (Economic, Technical or Organisational) reason exists. A dismissal that is for an ETO reason will potentially be fair as it may be regarded as either a dismissal for redundancy (subject to satisfying the statutory definition of redundancy) or a dismissal for “some other substantial reason” justifying dismissal.
• Change in workplace location- any dismissals or changes to terms and conditions arising from a change in the location of the workforce, will be capable of being an ETO reason with the result that any dismissals would not be deemed to be automatically unfair (although ordinary fairness principles would still apply), and changes to terms and conditions would not be void.
• Employee Liability Information– with effect to any transfers which take place on or after 1st May 2014 (not 30th April 2014 as originally proposed) the time period within which a transferee must provide employee liability information is increased to ‘no less than 28 days before the transfer’, (instead of the previous 14 days).
• Microbusinesses- businesses with fewer than 10 employees will be permitted to inform and consult directly with employees, rather than the current requirement to inform and consult with union or employee representatives.  This change will apply to transfers which take place on or after 31 July 2014.

In summary: if you are involved in taking over a business or service provision contract or selling a business or have lost a service provision contract, then you should seek professional advice on your legal obligations in relation to the employees affected by the acquisition/disposition of  the business/service provision contract.